Crypto prices experienced a significant downturn on December 1st, with Bitcoin and most altcoins seeing substantial losses as investors react to various negative headlines. The market’s decline is fueled by rising liquidations which have increased investor fear. While the market may see short-term boosts from factors like potential Fed rate cuts and a possible Santa Claus rally, experts believe the longer-term outlook remains uncertain. 440% higher liquidations on Monday to reach $781 million, signaling widespread selling pressure across different assets. The price drop was also fueled by several negative developments, including a S&P Global downgrade of Tether, one of the crypto industry’s most popular stablecoins. Arthur Hayes, co-founder of BitMEX, expressed concerns about Tether’s financial stability. Meanwhile, Strategy’s CEO highlighted potential Bitcoin selling due to unfavorable market conditions, raising further doubts about the market’s future trajectory. The downturn is also attributed to ongoing outflows from the crypto ETF space, with significant withdrawals observed in both Bitcoin and Ethereum markets. While some analysts predict a short-term recovery based on factors such as rising probability of Fed rate cuts and the potential for a Santa Claus rally, many remain skeptical about the market’s long-term outlook. The situation demands careful observation as investors navigate this volatile period.